V:Do I understand that “all marine risks” means less than “all risks”?

G:“Marine risks” refer to only the risk incidents to transport by sea,such as collision,stranding,fire,penetration of sea water into the holds of the ships,etc.In other words,under “all marine risks”,recoverable loss will only be confined to those arising from perils of the sea and maritime accidents only.The “all risks” coverage will admit all losses occurring at any time throughout the whole currency of the coverage,irrespective of whether they are caused by accidents at sea or on land.In this sense “all marine risks” provides a more limited cover than “all risks”.

V:I see.Another thing I don’t understand at this moment is the advantage of W.P.A.coverage.I thought that W.P.A.insurance should cover all principal risks while,according to what you say,it means very little.It seems to be a phrase without much substance.Just what is the difference between W.P.A.and F.P.A.?

G:This is a question which is very often overlooked,Mr.Vichers.It is a very common but mistaken idea that a merchant has done everything that is required to protect himself against losses when he has taken out W.P.A.insurance.There is,perhaps,no mistake more detrimental to his interests.

V:That interests me very much.I must confess that I was under the impression that W.P.A.insurance was quite sufficient and that losses due to breakage were covered.I know that F.P.A.insurance does not cover losses on consumer goods,but I do think that the W.P.A.insurance covered more risks than the F.P.A.

G:Actually it is like this.There is some difference between W.P.A.and F.P.A.The F.P.A.clause does not cover partial loss of the nature of particular average,whereas the W.P.A.clause covers such losses when they exceed a prearranged percentage.This is the only difference between W.P.A.and F.P.A.Otherwise,the protection under the F.P.A.clause will be almost identical with that offered by the W.P.A.clause because in the event of maritime accidents encountered in transit,such as stranding,fire,explosion or collision,both clauses will cover particular average losses in full.

V:I don’t mean to annoy you but,Mr.Guo,I still don’t quite get it.Couldn’t you say it in simpler terms?

G:I’ll try.Neither the W.P.A.nor the F.P.A.mentions the risks covered or the risks excluded.The specific item insured is stipulated in the articles of basic policy form and in the various risks clauses.Look at the insurance certificates and you will find that the risks of theft and pilferage,freshwater,oil,grease,hooks,breakage,leakage,contamination,deterioration,etc.,are specifically mentioned and must be specifically applied for.These are special or particular risks.F.P.A.stands for “Free from Particular Average”,while W.P.A.stands for With Particular Average.

V:Mr.Guo,I must say that you have corrected my ideas about the insurance.I see now that this is far more complicated than I ever imagined.

B:Now I know why you often point out to us the wording of some letters of credit which you don’t feel happy about.But what are we to do with our present consignment? We must keep to the stipulations of the contract and the letter of credit,I presume.

V:The blame does not only rest with the opener of letter of credit.For an item like ceramics,I believe the Light Industrial Products Corporation should have understood from our letter of credit that we wanted to cover all the risks,including the risk of breakage.I must say the error was on both sides and I think the loss ought to be shared by both parties,let me say half and half.

B:Our price calculation could hardly allow that.Besides,we have acted upon your instructions,so it is not our fault.But in view of our good relationship,we’ll supply you with a favorable offer to compensate some of your losses.

G:(Rising) I sincerely hope that you gentlemen will settle the matter to our mutual satisfaction.

V:It goes without saying that both parties must abide by the contract terms which we have agreed upon and signed.This blunder,due to my ignorance,has taken me a beat and cost me a pretty penny.

B:We also have learned a lesson from this.

V:Well,to compensate a part of the loss,as you suggested,may I ask you to make us a firm offer for 50,000 glazed wall tiles CIF Manila including the risk of breakage,November shipment?

B:We’ll make you a favorable offer tomorrow.Come and see us at 9:00 a.m.

V:Thank you.Tomorrow at 9:00 then.